After 40 minutes in executive session, the Rockingham Selectboard on Thursday decided to issue a notice of default and terminate its contract with Baybutt, one day after the Keene, N.H.-based company lost a contract with the state of Vermont.

Though Selectboard member Matthew Trieber -- also the district's state representative in Montpelier -- was absent, the board voted unanimously to authorize Chairman Tom MacPhee to sign the letter that was to be faxed to the general contractor Thursday night.

Baybutt is the general contractor of the project to completely renovate the Rockingham Free Public Library.

According to the letter, the Selectboard cited Baybutt's failure to pay subcontractors and secure a required performance and payment bond as two of the reasons for the contract's termination. All subcontractors are refusing to continue their jobs, insisting they have not been paid for the work they have done.

Selectboard members also say the corporation, under oath, falsely stated all appropriate amounts were paid to subcontractors that issued certificates for payment. Members also doubt Frederick Baybutt, president of Baybutt Construction, will be able to secure the financing necessary to pay the project's subcontractors and vendors what they are owed -- which he is trying to do.

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Stephen Ankuda, legal counsel to the town, said Baybutt has seven days to rectify the situation and get everyone back to work. However, even if this deadline passes, the town cannot assign any other general contractor to the project for another three days.

When asked what will happen to the project because there is no bond, MacPhee said that "is a discussion for another day."

MacPhee also said he is not sure if there will be any cutbacks to the project.

The executive session included the members of the Rockingham library's board of trustees, who then adjourned to their own meeting at Immanuel Episcopal Church.

"We hope Baybutt can work out the situation," Trustee Janice Mitchell-Love told the Reformer during the meeting. The trustees had their own executive session scheduled to discuss the contract's termination at the end of the meeting.

A number of liens have been filed in the Rockingham town land records office by the subcontractors, also known as subs, and vendors who refuse to return to the job until they are financially compensated. Baybutt, the general contractor, however, did not take out a performance bond or a payment bond, which act as insurance contracts of sorts.

Ankuda said having a performance bond was a project requirement from the town. Baybutt submitted a statement, which said the business was entitled to be paid for percentages of the project completed and that it had a $21,000 performance bond, which it actually did not. Ankuda said he has been told Baybutt thought it had the necessary bonds and is not sure how everything managed to happen the way it did.

Baybutt is going through some other difficulty as well; a building on Avon Street in Keene and the Granite Gorge Ski Area on Route 9 in Roxbury are scheduled to be part of a foreclosure sale on Friday, Feb. 1. It will be a public auction.

The Keene Sentinel also reported that last week Frederick Baybutt declined an interview but sent an e-mailed response to subcontractors' claims related to the construction of the new Keene Fire Station.

"The project is bonded and we are working with the insurance company ... to make sure everyone will be paid. In the meantime I'm getting financing in ... to right the ship," the Sentinel quoted him as saying.

Ankuda said Rockingham has already paid Baybutt roughly $900,000 for the percentage of work done on the library and for the performance bond that did not exist. He told the Reformer a general contractor is required to compensate the subcontractors within seven days of being paid. Ankuda said it is all up to Baybutt at this point, adding that the company has a right to attempt to cure any defaults.

At Thursday's meeting, he said the town has paid Baybutt for the work that has been completed. He told the Reformer earlier in the week that Rockingham signed a typical American Institute of Architects contract, which he said is standard in the industry.

No one at the meeting knew how this quagmire started but Bellows Falls/Rockingham Municipal Manager Tim Cullenen on Tuesday said that "somewhere in the wording of the contract, something fell through the cracks."

The same problem with subcontractors occurred at the state building in Brattleboro.

Bob Rea, the Vermont Department of Buildings & General Services' director of facilities for the eastern region, said he started hearing concerns about the lack of progress being made on the project at 232 Main St. He then began getting phone calls from subs and vendors who claimed they have not been paid by Baybutt and learned the stalled progress came from a lack of staffing because they refuse to continue their work. As a result, he said, the state decided to terminate Baybutt's contract.

Rea said as a result of Baybutt's November request for payment, three subcontractors in December received 75 percent of what they were owed via dual party checks from the project manager. But the state then got a letter from the bonding company, Merchants Bonding Company, forbidding the state from making any further payments to Baybutt without prior approval.

Despite all the problems and the halt in construction, the state building is expected to open in April.

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